LETTER: Urban decline a fly in the land tax ointment

Henry George’s great idea has been around for over 100 years, without gaining much traction. That’s because it’s never explained in a manner that obviates how unfair it is to concentrate on personal income over the unlaboured-for appreciation of assets: such as property and natural resources. Bronwyn Williams’ contribution continues that tradition by couching the idea in terms of land (“Old ideas offer a new take on land ownership”, February 14).

Our system already taxes land appreciation via “capital gains”, while from mineral extractions the state draws “royalties”, both being supertaxes. But a wholesale shifting of our tax regime from income to assets, changing the foundations as it were, is George’s true proposal. His idea’s time has indeed now come because we inhabit an urban world. It is in urban areas, via labour concentrations, that land values and rents have escalated far faster than incomes, and will continue to do so.

However, there is a second factor driving urban land values upwards — public infrastructural investments. Public funds that improve local environments push up the value of adjacent private properties. And it is here where SA has been failing. In allowing CBDs to decline, allowing small- and medium-sized towns to die, and by turning a blind eye to neighbourhood crime, asset appreciation is stalled and with it George’s would-be tax take.

Furthermore, if receipts from property appreciation do not find their way into an enhancement of local areas by the public sector, the tax will remain unpopular.

Jens Kuhn
Cape Town

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